OK, let's try an example to see if you get it.
Mr Sparky needs to make £200.
The retail price for the materials is £100. He gets a 40% discount at the wholesalers.
You do not.
PRICING MODEL A - WITH MARKUP.
Materials £60
Markup on materials £40
Labour £160
Total £260
Your spend on materials £0
Overall price to you £260.
PRICING MODEL B - WITHOUT MARKUP.
Materials £0
Markup on materials £0
Labour £200
Total £200
Your spend on materials £100
Overall price to you £300.
Mr Sparky needs to make £200.
The retail price for the materials is £100. He gets a 40% discount at the wholesalers.
You do not.
PRICING MODEL A - WITH MARKUP.
Materials £60
Markup on materials £40
Labour £160
Total £260
Your spend on materials £0
Overall price to you £260.
PRICING MODEL B - WITHOUT MARKUP.
Materials £0
Markup on materials £0
Labour £200
Total £200
Your spend on materials £100
Overall price to you £300.
